EXCLUSIVE: Saudi Arabia seeks weather services privatisation advisors

04 May 2017

The kingdom plans to privatise state-run meteorological centres to cut costs

Saudi Arabia’s Presidency of Meteorology and Environment (PME) is looking to hire financial advisors to help it privatise state-run meteorological centres as part of Riyadh’s plans to cut costs and monetise some of government services.

PME has sent a request for proposals in March, asking the firms to pitch for a financial advisory role to help it prepare the deal and seek potential private sector partners, according to sources aware of the matter, who asked not to be named as information is private.

It is not clear, how many responses PME has received so far, they added.

PME is a government body tasked with the oversight of all environment-related issues in Saudi Arabia and is the main source for government and businesses for meteorological information and weather prediction. It deals with both public and private sectors in implementing air pollution standards and its services span municipal, medical and industrial waste management; used oil and asbestos management and marine and coastal environment management.

The General Authority of Civil Aviation (GACA), also relies on PME’s reports to run its air traffic operations across the country. The body, which is responsible for creating public awareness towards environmental issues, also provides the Saudi media outlets with early weather-related warnings to avoid collateral loss of life and property.

The provision of services similar to PME in other markets such as Europe is usually carried out by private sector firms, which then sell the weather and meteorological information to aviation authorities and news channels. It is, however, uncertain if PME will be able to garner significant private sector interest for its operations in the kingdom.

Saudi Arabia is trying to radically transform its economy and privatise some of the state-controlled enterprises and services to lessen burden on the exchequer. Riyadh plans to part sell about 100 government enterprises, including a stake in oil and gas giant Saudi Aramco through a public float.

The kingdom expects its privatisation programme could yield about $200bn in total through full or partial sale of government firms. Administrative preparations have already been made and the kingdom plans to begin offering assets in four sectors: sports, electricity generation, water provision and grain silos this year.It has already appointed advisors to sell more than a dozen professional football clubs to private sector investors. Within the healthcare sector, King Faisal Specialist Hospital and Research Centre in Riyadh is first government assets to be privatised. Riyadh is also studying the option of whether to sell off all public hospitals and 200,000 pharmacies.

In April MEED reported that Saudi Grains Organisation, a state-controlled grain silos and flour mills operator, is aiming to begin the prequalification process for privatisation of its milling operations by the end of June. Riyadh has split the company’s milling operations into four special purpose vehicles (SPVs), which currently remain under the ownership of the sovereign wealth fund Public Investment Fund (PIF). The government will sell 100 per cent equities in all of the four SPVs.

State-controlled Saudi Electricity Company (SEC) is also being divided in the four generation companies and private the first company this year, MEED reported in November last year.

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